Thursday, September 22, 2022

Gannett, cutting costs after a big quarterly loss, is trying to sell at least 60 of its smaller papers, 'industry insiders' say

"Industry insiders say Gannett is shopping at least 60 of its nearly 500 publications, after dumping more than 100 since 2020," former media executive Greg Burns reports for the Local News Initiative at Northwestern University. Burns notes several recent purchases of Gannett weeklies by CherryRoad Media, "an acquisitive tech company from New Jersey that has purchased dozens of Gannett newspapers over the past two years."

CherryRoad CEO Jeremy Gulban told Burns that Gannett is shedding smaller papers in more isolated markets. “This is a tough time for the newspaper business. They’ve got to play the best hand they can,” he said. “They have a national brand in USA Today and strong regional markets. No one disputes that print revenues will continue to decline. It has to be replaced with digital revenues and the question is, how much and how fast?”

Burns's story is mainly about Gannett's cost cutting following a $53.7 million loss in the second quarter. Soon after that was announced, Chairman and CEO Michael Reed's forecast that by 2024, the company's digital revenues will grow enough to more than make up for the decline in its print business. "So far, Wall Street isn’t buying it," Burns writes. "Gannett stock has plunged 70% to $2.10 on Sept. 20, from a peak of $7 a year earlier, as Reed’s optimistic forecast for 2024 failed to move the share price higher. Also leaving investors unmoved was his decision to invest $1.2 million of his personal fortune in Gannett stock shortly after reporting the second-quarter loss. The stock spiked on the news, then went down again even more."

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